The Australian Government has released draft legislation aiming to exclude gambling and tobacco-related activities from eligibility under the Research and Development (R&D) Tax Incentive from 1 July 2025.
The proposal, announced in the 2024-25 Mid-Year Economic and Fiscal Outlook, seeks to prevent taxpayer-funded support for research that could contribute to addiction, health risks or other associated harms.
Under the draft measures, all R&D linked to gambling, tobacco or nicotine products would be ineligible for the incentive, regardless of format or delivery channel.
However, a narrowly defined carve-out would allow continued support for projects dedicated exclusively to harm minimisation, including research focused on reducing addiction or mitigating health impacts.
According to the Treasury, this exemption is intended to ensure that public funding remains aligned with broader health and welfare objectives.
Stakeholders can provide feedback until 30 January 2026 through the Treasury's submission portal. Supporting documents, guidelines and privacy requirements have been published to assist those preparing responses.
The draft is expected to draw interest from operators, technology suppliers and research bodies, particularly those whose current innovation pipelines intersect with gambling-related technologies.
The proposal comes at a time of heightened policy attention on gambling harm across Australia. In recent months, cross-party MPs have signalled support for a national gambling advertising ban, while state-level reforms - such as New South Wales' removal of 4am pokies exemptions - reflect growing public health concerns.
Regulatory activity at the federal level has also intensified, with ACMA continuing to block unlicensed offshore gambling websites and report increased enforcement actions.
The R&D Tax Incentive is Australia's largest innovation support program, costing roughly AU$3bn ($2bn) annually
